Editorial: No need for B.C. to be involved in retailing liquor

The provincial government should heed the union campaign to open more of the publicly owned liquor stores on Sunday. Then it should sell them all.

The poll commissioned by the B.C. Government and Service Employees’ Union confirms what the sales figures already show — that many British Columbians like to shop in government liquor stores. That’s not surprising. The stores are generally well run, well stocked and staffed with knowledgeable employees. Prices are generally competitive, which is also not surprising since the government sets the wholesale price for private liquor merchants based on the price it sets for its own retail outlets.

At the end of 2011, there were 197 government liquor stores with sales of $1.165 billion and net income of $413 million.

On Sundays, 175 of those stores are closed. BCGEU president Darryl Walker reasonably argues that by opening them on Sundays, the stores could sell more liquor, wine and beer, while incidentally providing more work for his members, without significantly increasing the fixed costs.

He argues persuasively that it makes no sense for the government to pay the leases for the premises, electricity, maintenance and other overhead for stores that could be bringing in what the union estimates would be another $100 million a year by keeping them open seven days a week.

What Walker fails to address, however, is the question of whether the government should be in the liquor business at all. The fact that the government is able to operate a business at a profit doesn’t mean that it should necessarily be in that business.

The province is already looking at proposals to sell its wholesale liquor distribution business. We’ve argued that while liquor distribution is a business the government should be getting out of, it’s going about it the wrong way. Instead of allowing a competitive market to flourish, it proposes to replace its public monopoly with a private one.

The asset it proposes to sell is the monopoly, rather than a business that can stand on its own in a competitive environment.

The retail business is different. As with the wholesale business, there is no longer any reason for the government to be operating liquor stores. Now that politicians no longer believe that public morality is at stake, there is no more reason to have state-owned liquor stores than there is for government getting into the grocery business or selling suits or screwdrivers.

Unlike the distribution system, the government liquor stores already operate in a competitive environment. Since the Liberal government opened up the retail liquor business to the private sector, most consumers in B.C. have had a choice about where to shop.

The liquor stores are a significant asset that could be and should be offered for sale as an operating entity. If, as it appears, they are operating profitably and have a loyal customer base, the government should have no trouble finding a buyer, who would also inherit the employees and the contract with the BCGEU.

The province should issue a request for proposals that would make it clear that the stores will continue to be operated even if it gets no reasonable offers for their purchase. The stores are offering a service to British Columbians, just not one that the government needs to offer.

Governments should only be in businesses in which there is a unique public benefit that cannot be achieved in any other way. With rare exceptions, the government should avoid using its extraordinary powers to compete with the private sector. Liquor stores do not meet that test.

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Editorial: No need for B.C. to be involved in retailing liquor

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